Articles Posted in Insurance Law

Plaintiff-appellant State Farm Automobile Insurance Company, as subrogee of its insured, sued for damages arising out of an automobile accident between the insured and Defendant-appellee Nicholas Payne. The insured, Tori Ukpaka, originally brought this action, but voluntarily dismissed it after the statute of limitations had run. Whether State Farm could revive that claim depended on whether it could take advantage of the Oklahoma savings statute at 12 O.S. sec. 100, which gives "the plaintiff" up to one year from the date of a non-merits-based termination in which to refile an otherwise time-barred claim. In light of the Oklahoma Supreme Court’s “historic” interpretation of that statute, it concluded that because State Farm was "substantially the same, suing in the same right" as its insured for purposes of a subrogation claim, it should be entitled to the same treatment as its insured for purposes of the savings statute. Accordingly, the Court held State Farm’s, filed within one year after its insured voluntarily dismissed the same, was timely. View "State Farm Mutual Automobile Ins. Co. v. Payne" on Justia Law

This case arose from a motor vehicle accident in 2012. William Taylor was driving a vehicle owned and insured by Guy's Seed Company (Guy's Seed); Appellant Mark Raymond was a passenger in the vehicle driven by Taylor. Both Raymond and Taylor were employees of Guy's Seed. Appellee American Mercury Insurance Company (Mercury) issued a commercial automobile insurance policy to Guy's Seed which provided uninsured/under-insured motorist (UM) coverage of $1,000,000 per accident. Larry Bedell was an employee of BlueKnight Energy Partners (BlueKnight); BlueKnight carried a $1,000,000 primary automobile liability policy and a $40,000,000 excess liability policy. Bedell was driving an oil tanker truck, owned by BlueKnight, and attempted to turn in front of the Guy's Seed vehicle causing a collision. The collision caused an immediate explosion, which resulted in Taylor's death and Raymond suffering significant permanent injuries. Raymond qualified as insured under Mercury's UM coverage. Raymond filed suit against Defendants, Bedell and BlueKnight. Mercury investigated and offered the UM policy limits to Raymond's and Taylor's representatives, paying $500,000 to each. Mercury then intervened in Raymond’s court case seeking subrogation from Defendants for the $500,000 payment made to Raymond under the UM policy. Raymond disputed Mercury's right to subrogation, but Defendants refused to settle unless the settlement amount was inclusive of Mercury's disputed subrogation claim. An agreement was reached where Raymond settled with Defendants for a confidential amount greater than the primary insurance liability limits but less than the excess policy; Defendants paid Raymond the amount of the settlement minus the $500,000 claimed by Mercury. The disputed $500,000 was to be held until there was an agreement or court order as to who was entitled to the funds. The question presented for the Oklahoma Supreme Court’s review centered on whether Mercury was entitled to subrogation for the $500,000 paid. The Supreme Court determined that contrary to Mercury's claims, Raymond was not receiving a windfall here. “Mercury was paid a premium for UM protection and Raymond recovered an amount not covering all of his damages within the limits of the primary liability policy and the UM policy. Raymond has also recovered an amount from the tort-feasor's other assets that, combined with the liability and UM funds, covered his damages. It would be unjust to permit Mercury to avoid its liability with its claim that the tort-feasor's other assets, that happened to be an excess liability policy, removed Mercury's liability thus denying Raymond from receiving that for which Mercury was paid a premium.” View "Raymond v. Taylor" on Justia Law

Bob Hensley (Buyer) purchased real estate by contract for deed. He sued the insurer of the property's previous owner, State Farm Fire & Casualty, alleging breach of the implied-in-law duty of good faith. Insurer filed a motion for summary judgment and argued buyer was a stranger to the insurance contract and could not bring an action against insurer. The trial court granted the insurer's motion for summary judgment. The judgment was appealed and affirmed by the Court of Civil Appeals. After review, the Oklahoma Supreme Court held the buyer's action in this case for breach of the implied-in-law duty of good faith by an insurer was based upon his status as an insured or third party beneficiary; and buyer's equitable title to property arising from a contract for deed is insufficient by itself to confer upon him the status of an insured. The Court also held the buyer presented facts on the issue whether he was an intended third party beneficiary, and these facts and their inferences were disputed by insurer. Whether buyer was a third party beneficiary and an insured under the policy based upon disputed facts and inferences was a matter for the trier of fact, and summary judgment for insurer was improvidently granted. View "Hensley v. State Farm Fire & Casualty Co." on Justia Law

Plaintiff-appellee Elizabeth Cates filed on her behalf and a putative class asserting claims against the defendant-appellee INTEGRIS Health, Inc. for breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, specific performance, and punitive damages. INTEGRIS successfully moved to dismiss the claims based on the ground that they are all preempted by the Employee Retirement Income Security Act. Cates appealed. Because the trial court in this matter did not take into consideration the federal Tenth Circuit Court of Appeals’ decision in Salzer v. SSM Health Care of Oklahoma Inc., 762 F.3d 1130 (10th Cir. 2014), which was factually similar to the facts of this case and found that the plaintiff’s claims were not preempted, the Oklahoma Supreme Court reversed and remanded the trial court in this matter for reconsideration in light of Salzer. View "Cates v. Integris Health, Inc." on Justia Law

Employee-appellant Tracy Meeks sued an insurer for bad faith refusal to timely comply with several orders of the Workers' Compensation Court awarding employee temporary total disability benefits after the insurer, without good cause, withheld employee's benefits on twenty-six separate occasions. Insurer moved for dismissal, asserting employee failed to obtain a certification order from the Workers' Compensation Court (a jurisdictional prerequisite for commencing a bad-faith action in district court). The District Court granted insurer's motion, but the Supreme Court reversed. Because the certification requirements were met here, employee was free to proceed in district court on his bad-faith claim against insurer for insurer's alleged bad faith refusal to provide temporary total disability benefits as ordered by the WCC. View "Meeks v. Guarantee Insurance Co." on Justia Law

Defendant Century Surety Company (Century) issued a Commercial Lines Policy to Plaintiff Siloam Springs Hotel, L.L.C. (Siloam). This policy included general liability insurance coverage of Siloam's hotel in Siloam Springs, Arkansas, for the policy period from November 13, 2012, through November 13, 2013. The insuring agreement of the general liability coverage form provided that Century would pay sums the insured was legally obligated to pay as damages because of bodily injury to which the insurance applies and that Century would have the right and duty to defend the insured against any suit seeking such damages. On January 17, 2013, several guests inside of the hotel allegedly suffered bodily injury due to carbon monoxide poisoning. The carbon monoxide allegedly escaped into the air due to leakage from the hotel's indoor swimming pool heater. Siloam sought coverage under its policy from Century, which Century denied based on an Indoor Air Exclusion at issue. The United States District Court for the Western District of Oklahoma certified a single question of Oklahoma law to the Oklahoma Supreme Court under the Revised Uniform Certification of Questions of Law Act, 20 O.S. 2011 sections 1601-1611: “Does the public policy of the State of Oklahoma prohibit enforcement of the Indoor Air Exclusion, which provides that the insurance afforded by the policy does not apply to ‘Bodily injury', 'property damage', or 'personal and advertising injury' arising out of, caused by, or alleging to be contributed to in any way by any toxic, hazardous, noxious, irritating pathogenic or allergen qualities or characteristics of indoor air regardless of cause?” The Oklahoma Supreme Court answered the question in the negative. View "Siloam Springs Hotel, LLC v. Century Surety Co." on Justia Law

Plaintiff-appellant Malinda Falcone brought an insurance claim against defendants-appellees for payment of her emergency room medical expenses. Her claim was made pursuant to the Uninsured/Underinsured Motorist (UM) provisions of her mother's automobile insurance policy following the injuries she sustained as a passenger in her mother's car when an uninsured driver ran a stop sign and collided with them. Defendants initially questioned the decision to refer Plaintiff to the level 2 trauma center of the emergency room and refused to pay the bill Plaintiff received from the OU Medical Center trauma center. After nearly a year of offers and rejections, Plaintiff sued for breach of the implied duty of good faith and fair dealing for failing to pay her trauma room "compensatory damages" as required under the policy. The trial court granted summary judgment in favor of defendants and denied Plaintiff's motion for new trial. After review, the Supreme Court held that it was a question for the trier of fact whether defendants showed a lack of good faith in handling Plaintiff's claim for payment. The trial court erred in granting summary judgment in defendants' favor, holding as a matter of law that defendants did not commit the tort of bad faith. View "Falcone v. Liberty Mutual Ins. Co." on Justia Law

Insured Kourtni Martin suffered serious injuries from an automobile collision in Oklahoma City with Nicholas Gray. At the time of the collision, Insured had UM coverage with Goodville Mutual Casualty Company. The policy was purchased by her parents while they lived in Kansas. She was, however, a listed/rated driver in the policy. Before the collision, Martin's parents notified the Kansas agent that she was moving to Oklahoma to live with her grandmother and that her vehicle would be garaged in Oklahoma. After the collision, the claim was reported to the agent in Kansas who then transmitted the claim to Insurer which was located principally in Pennsylvania. The claim was adjusted out of Pennsylvania. Martin was unable to locate Gray. Her attempts to serve Gray, or his insurer, in Oklahoma and Texas failed. Martin filed this lawsuit against Gray alleging negligence (later adding breach of contract and bad faith against her Insurer). After service by publication, Gray answered asserting a general denial. Martin sought compensation from the Insurer pursuant to her UM policy and negotiations began between Insured and Insurer regarding medical bills and projected future medical bills substantially in excess of $100,000. Insurer offered $27,000 for medical expenses under the "Kansas No Fault Benefits" and $10,000 in UM coverage. The trial court, after reviewing the policy at issue here, applied Kansas law to this case and dismissed Martin's bad faith claim against the Insurer (with prejudice). After review, however, the Oklahoma Supreme Court concluded the trial court erred in applying Kansas law, finding that the actions by Insurer related to the bad-faith claim appear to have occurred primarily in Oklahoma and Pennsylvania: (1) any injury from the alleged bad faith occurred in Oklahoma where Insured is located; (2) the alleged conduct causing injury from bad faith occurred in Oklahoma or Pennsylvania, where the claim was handled; (3) the domicile of Insurer and Insured are Pennsylvania and Oklahoma, respectively, and (4) the place where the relationship between the parties occurred had yet to be determined. However, because the trial court did not apply the "most significant relationship test," there was no evaluation of these factors according to their relative importance. Despite the parties' voluntary settlement of this case, the Supreme Court nevertheless remanded this case for the trial court to make findings with respect to the "most significant relationship test," and then to dismiss. View "Martin v. Gray" on Justia Law

Appellant-plaintiff Robert Leritz was a Kansas resident whose motorcycle and two other vehicles were garaged in Kansas under an insurance policy issued by Appellee, Farmers Insurance Company (Farmers) in Kansas. Plaintiff was injured in a motorcycle accident in Oklahoma when Defendant Larry Yates made a left hand turn and collided with Plaintiff causing serious bodily injuries. Plaintiff brought this action alleging that he had incurred medical expenses and suffered damages exceeding Yates's liability coverage. There was a question as to whether he could stack his uninsured motorist (UM) coverage based on his ownership of policies on each of his three vehicles. Oklahoma allowed the practice, until the Oklahoma Legislature amended the UM provision in 2014. Kansas did not allow stacking. The trial court granted summary judgment to the insurer and the Court of Civil Appeals affirmed, applying the insurer's proposed solution to a perceived conflict of laws issue. The Oklahoma Supreme Court found no conflict of laws issue on these facts because the policy specified which law would apply to an issue of stacking of policies. Giving the policy provisions effect made a choice of law analysis unnecessary; the Court vacated the Court of Civil Appeals, reversed the district court and remanded for further proceedings. View "Leritz v. Farmers Insurance Company, Inc." on Justia Law

The issue in this case was whether the plaintiff-appellant Sandra Vilarrubias Serra was covered under the uninsured/underinsured motorist (UM) and medical payments (medical pay) coverage of the automobile insurance policy issued to Traci Robertson by Appellee State Farm Mutual Automobile Insurance Company. Serra was a foreign exchange student from Spain who was attending her senior year of high school in Pryor. She resided with Robertson in Pryor. As a passenger in the car of a friend, Andrea McNair, she sustained serious injuries when McNair's car collided with Donald Broughton, who was driving a motorcycle. Broughton was killed in the accident. Serra attempted to collect damages for her injuries by filing a claim against Robertson's automobile policy's uninsured motorist and medical payments coverage. State Farm denied coverage to Serra who then filed a lawsuit against the Personal Representative of Donald Broughton, Andrea McNair and State Farm. State Farm filed a motion for summary judgment in the trial court which was granted. The Court of Civil Appeals (COCA) affirmed the trial court. In particular, the issue this case presented for the Supreme Court's review was whether Serra was a "ward" of Robertson for purposes of coverage under the policy. The Court held that she was covered and reversed. View "Serra v. Estate of Broughton" on Justia Law